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EXHIBIT 10.12
MASTER TRANSACTION AGREEMENT
This Master Transaction Agreement (this "Agreement"),
effective as of this 5th day of April, 2000, is made and entered into by and
among Xxxxxx Xxxxxx, Inc., a Delaware corporation ("CHI"), Xxxxxx Xxxxxx
Partners III, L.P., a Delaware limited partnership ("CHP III" and, together with
CHI, "CHP"), and Universal Compression Holdings, Inc., a Delaware corporation
(the "Company").
RECITALS:
WHEREAS, the Company and certain of its subsidiaries entered
into a Stock Purchase Agreement dated as of December 18, 1997, providing for the
purchase by the Company, through a subsidiary, of all of the outstanding stock
of Tidewater Compression Service, Inc. (the "Acquisition"); and
WHEREAS, in connection with the Acquisition, CHI, CHP III and
the Company, among others, entered into a number of agreements; and
WHEREAS, the Company desires to offer shares of its common
stock, par value $.01 per share (the "Common Stock"), to the public in an
initial public offering (the "Offering") and, in connection with the Offering,
CHP and the Company desire to amend, modify or terminate certain of the
agreements between them and to evidence the other arrangements described herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Termination of Agreements. The parties agree that, effective upon the
closing of the Offering (the "Closing"), each of the following agreements shall
be terminated and shall be of no further force and effect, except as specfically
noted below:
(a) the Management Agreement dated as of February 20, 1998 by
and among the Company, CHI and Universal Compression, Inc. (a
subsidiary of the Company) (the "Management Agreement"), except with
respect to the indemnification provisions contained in Section 7 of the
Management Agreement shall continue in full force and effect and
subject to payment pursuant to Section 2 hereof; and
(b) the Voting Agreement by and among the Company, CHI and
Spectrum Energy Partners, LP.
Each of CHI and CHP III agrees to execute or cause the
execution of appropriate instruments of termination as the Company may request
with respect to the termination of the foregoing agreements.
Section 2. Amendment of Agreements. The parties agree to amend
the following agreements as described below:
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(a) the Voting Agreement dated as of February 20, 1998 by and
among the Company, CHP and certain stockholders of the Company shall be
amended as set forth in the First Amendment to Voting Agreement, the
form of which is attached hereto as Exhibit A;
(b) effective as of the Closing, each of Xxxxxxx Xxxxxx, Xxxxx
Xxxxxx and Xxxxxx Xxxxxxx, shall be released as parties to the Voting
Trust Agreement dated as of February 20, 1998 by and among the Company,
certain of its stockholders and Xxxx X. Xxxxxx, as Voting Trustee, as
set forth in the Release of Parties to Voting Trust Agreement, the form
of which is attached hereto as Exhibit B; and
(c) effective as of the Closing, each of the Stockholders (as
such term is defined in the Voting Trust Agreement referred to in this
subsection (c)) other than Xxxx Xxxxx XxXxxxx, Xxxx Xxxxx XxXxxxx,
Xxxxxx Xxxxx XxXxxxx, Xxxx Xxx XxXxxxx, Xxxx Xxxxx XxXxxxx, Xx. and
Xxxx Xxxxxxxx XxXxxxx Xxxxxxx (each of whom shall remain a party to
such Voting Trust Agreement), shall be released as parties to the
Voting Trust Agreement dated as of December 1, 1998 by and among the
Company, certain of its stockholders and Xxxx X. Xxxxxx, as Voting
Trustee, as set forth in the Release of Parties to Voting Trust
Agreement, the form of which is attached hereto as Exhibit C.
Section 3. Payment to CHP. In consideration of the early
termination of the Management Agreement (other than Section 7 thereof), within
three business days following the Closing, the Company shall (i) pay to CHI
$3,000,000 by wire transfer of immediately available funds and (ii) issue to CHI
the number of shares (the "Payment Shares") of the Company's Common Stock equal
to 3,000,000 divided by the initial public offering price per share of the
Common Stock in the Offering.
CHI acknowledges that the Payment Shares have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law ("Blue Sky laws"), by reason of a
specific exemption from the registration provisions of the Securities Act and
the applicable Blue Sky laws and that any certificate representing the Payment
Shares will contain a restrictive legend to such effect. CHI further
acknowledges that, as such, the Payment Shares are characterized as "restricted
securities" under the Securities Act and that under the Securities Act and
applicable regulations, such Payment Shares may be resold without registration
under the Securities Act only in certain limited circumstances. In this
connection, CHI represents that it is familiar with Rule 144 promulgated under
the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
Section 4. Nomination of Directors.
(a) Following the Closing, at any annual meeting of
stockholders of the Company for which the term of any of the three
directors of the Company affiliated with CHP expire (or in the event of
their earlier death or resignation), the Company agrees that it shall
nominate an individual designated by CHP (the "CHP Designee") to serve
in such
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individual's applicable class of the Company's Board of Directors for a
term ending on the third annual meeting following the meeting at which
such director was elected, such that CHP shall have the right to
designate an aggregate of three nominees for the Company's Board of
Directors; provided that, in the judgment of the Company's Board of
Directors, the applicable CHP Designee is reasonably qualified to serve
as a director; and provided further that following the Closing, Xxxxxx
Xxxxx shall not be considered a CHP Designee. The Company further
agrees that following the Closing (i) if requested by CHP, it shall
increase the size of its Board of Directors to permit the initial
nomination of the third CHP Designee to Class C of the Company's Board
of Directors, which vacancy shall be filled by the Board at such time
as CHP may direct and which CHP Designee shall hold office for a term
expiring at the annual meeting of stockholders at which the term for
Class C directors expires and (ii) in any proxy statement of the
Company covering the election of a CHP Designee, the Company shall
recommend to its stockholders that they vote to elect such CHP
Designee.
(b) The obligations set forth in Section 4(a) above shall
terminate in the event that CHP and its affiliates collectively own
beneficially for purposes of Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), less than 15% of the
Company's outstanding Common Stock as evidenced by filings under the
Exchange Act.
(c) The parties agree that no directors' fees or other
compensation shall be payable by the Company to the CHP Designees by
reason of their service as members of the Board of Directors of the
Company or on any committee thereof, other than reimbursement for
reasonable out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors or any such committee.
Section 5. Release of Stock Certificates.
(a) Upon execution of this Agreement, each of CHI and CHP III
agrees to return or cause to be returned to the Company any
certificates representing shares of Common Stock, Non-Voting Common
Stock or Preferred Stock subject to the Voting Trust Agreements that
have been repurchased by the Company.
(b) Upon the Closing, each of CHI and CHP III agrees to return
or cause to be returned to the Company, for return to the appropriate
holders, all other certificates representing shares of Common Stock,
Non-Voting Common Stock or Preferred Stock held by parties released
from the various Voting Trust Agreements, as described in Section 2
hereof.
Section 6. Actions Effective Upon the Closing. Except as
otherwise set forth herein, the parties hereto intend that all actions to be
taken hereunder that are to be effective upon the Closing shall be taken
concurrently, and the completion of each such action, including the Closing, is
conditioned upon the completion of all such actions.
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Section 7. Reimbursement of Expenses. At or prior to the
Closing, CHP will submit to the Company for reimbursement receipts with respect
to all expenses incurred by it or its affiliates that are subject to
reimbursement under the Management Agreement as of the Closing. The Company
shall reimburse these expenses promptly following the Closing; provided that
there shall be no future reimbursement by the Company of expenses under the
Management Agreement other than those so submitted.
Section 8. Further Assurances. Each of the parties hereto
agrees to take all actions necessary, subject to any fiduciary duties of such
party, to effectuate the purposes and intent hereof and to permit the
fulfillment of the terms hereof and the taking of the actions contemplated
hereby.
Section 9. Term. In the event that the Closing shall not have
occurred on or before December 31, 2000, this Agreement shall terminate and be
of no further force and effect.
Section 10. Binding Effect. This Agreement shall inure to the
benefit of and shall bind the predecessors, successors, assigns, representatives
and beneficiaries of the parties, and each of them.
Section 11. Entire Agreement; Amendment. This Agreement and
the exhibit hereto constitute a single integrated contract expressing the entire
agreement of the parties hereto with respect to the subject matter hereof. All
prior discussions and negotiations between the parties, whether oral or written,
concerning the matters addressed in this Agreement shall be superseded by this
Agreement. Any amendment, modification, or supplement to this Agreement must be
in writing and signed by the parties hereto.
Section 12. Severability. In the event that any provision of
this Agreement should be held to be void, voidable or unenforceable, the
remaining provisions hereof shall remain in full force and effect.
Section 13. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which shall together constitute one and the same instrument.
Section 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written.
XXXXXX XXXXXX, INC.
By: Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title:
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XXXXXX XXXXXX PARTNERS III, L.P.
BY: XXXXXX XXXXXX, INC.,
ITS INVESTMENT MANAGER
By: Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title:
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UNIVERSAL COMPRESSION HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Executive Vice President
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